The program, called “Pitch to Pilot,” offers startups a submission form that takes 15 minutes to complete, with a response promised within 30 days. The platform was created in part to streamline the communication process between startups and Target. The retailer recently took 11 startups through an accelerator in partnership with Techstars, and it seems to be ramping up efforts to drive growth in its digital business.
The program could help Target devise a more effective e-commerce strategy. Fielding ideas from various technology vendors may lead Target to discover more innovative ways to connect with its digital customers. For example, Target is currently working with a startup called AddStructure to integrate voice recognition technology into its search function. This could enable Target to capture more sales from its customers by making it easier for them to find the items they want.
This type of technology might also increase the incentives for shoppers to search for products through the Target mobile app. Only 16% of mobile shoppers start their product search on a retailer mobile site or app, compared to 50% who start with Amazon. Providing technology that brings customers to Target’s app or website could help the retailer mitigate losses in web traffic to Amazon.
Target is currently missing expectations in e-commerce. Target’s Chief Digital Officer, Jason Goldberger, recently exited the company, and the retailer hasn’t been able to accelerate its digital sales as it promised.
- Online sales growth hasn’t matched expectations: Target’s CEO, Brian Cornell, told investors that the retailer would capture 40% digital growth in 2015, however, growth came in at 31% for the year, according to Reuters.
- Digital remains a miniscule share of its total business: Despite YoY digital growth of nearly 40% in recent memory, the retail giant only generates 3.3% of its sales from digital channels.
- The retailer’s online sales growth is converging with one of its chief rivals: Although Target has traditionally led Walmart in online growth, in Q2 2016, Walmart narrowed the gap significantly — Walmart’s online sales grew 11.8% YoY, while Target’s grew 16%, marking about a four-percentage-point differential. This figure was down measurably from 23% in Q1, and flat with the e-commerce industry growth rate of 15.8%.